Retail Unwrapped from The Robin Report

How Barnes & Noble Made a Comeback

Mark Faithfull — Thu, 05 Mar 2026 05:01:00 +0000

Depending on what you read, no one is reading books anymore. Are we addicted streamers? A 2025 study found that daily reading for pleasure dropped by over 40 percent in the last 20 years, with nearly 46 percent of U.S. adults not reading a single book in 2023. Americans are reading an average of 12.6 books per year. Invoking the 80/20 rule, in 2025, 19 percent of adults (those who read 10+ books) accounted for 82 percent of all books read.

The numbers would validate the fact that the iconic Barnes & Noble bookseller was pushed to the edge of extinction, accelerated by the unrelenting digital rise of Amazon. So, it is all the more counterintuitive that Barnes & Noble stands as one of the most remarkable retail turnarounds of the past decade.

How did Barnes & Noble turn around a dying business? And the answer is: James Daunt revitalized an iconic brand by re-humanizing the business.

B&N Rising from the Ashes

If you follow the readership numbers, it is surprising that under the leadership of James Daunt, the English-born bookseller has not only clawed back relevance but has also expanded to the point that its private equity owner is readying an initial public offering for the combined Barnes & Noble and Waterstones business.

Elliott Management is expected to hire investment bank Rothschild & Co. to advise on options for a public offering of its retail group, which could happen as early as the second quarter of this year and is likely to be on the London Stock Exchange. So just how did an ailing bookseller turn the tables on a global digital giant with endless bookshelves and its own e-readers glued to its proprietary screens? And then is the 20 percent of book-reading consumers responsible for Barnes & Noble’s success? It’s a logical assumption.

Elliott Takes Waterstones Formula to the U.S.

When Elliott Investment Management acquired Barnes & Noble in 2019 for $683 million, revenue was in decline, losses were mounting, and it faced a formidable competitor in Amazon; the digital behemoth had fundamentally changed how Americans bought and consumed books. For years, Amazon’s market dominance, ease of purchase, low prices and proprietary Kindle e-reader left traditional bookstores struggling to turn the page.

James Daunt’s arrival in New York was greeted with cautious optimism. A former banker, he had his own successful, eponymous bookstore group in the U.K, which he continues to own. Daunt brought a philosophy radically different from the corporate uniformity that had defined Barnes & Noble’s operations for years as a mall and main street staple. Drawing on his experience at Waterstones, where he had been at the helm since 2011, he insisted local stores be run more like independent shops than cookie-cutter chains. Daunt undertook a sweeping cultural overhaul. Local store managers were empowered to curate selections tailored to their communities, shelving displays were reimagined, and the emphasis shifted from broad and deep inventory to curated discovery.

“Everybody thinks that we must be doing one thing; either we must be going small, or we must be going large. The fact is, we’re doing everything,” Daunt told me about the range of store formats Barnes & Noble is now operating. He stressed his long-held belief that physical retail can compete with the utility of online bookstores as long as it offers variety and relevance to its local customers.

Barnes & Noble Expansion

The transformation has been dramatic. Barnes & Noble opened over 60 new stores across the U.S. in 2025 and pushed its holdings above 700 locations, with plans for 60 more in 2026. Waterstones in the UK is approaching 400 stores, with more expansion planned.

The company remains determined that the store portfolio will be just as eclectic as the site selection, although the new stores are generally smaller than its traditional larger-footprint outlets. This reflects the change of emphasis to a curated rather than all-encompassing offer and the more cost-effective nature of smaller units.

Daunt said that when expanding locations, he was less interested in the plethora of analytical location data and more focused on gut feel. New locations are driven by “self-observation” from the company’s field team, who identify possible sites and store managers ready for the next step to run their own stores. While he is reticent to admit his personal satisfaction, Barnes & Noble took over some former, shuttered Amazon Books stores. It’s hard not to conjure up the image of Daunt’s victory stroll through a repurposed and more relevant bookstore.

Building Loyalty

“The model that we now have, which devotes considerable responsibility and accountability to the store teams, means you can set up a store appropriate to the place in which you find yourself. We’re not trying to have the same store on the Upper East Side as we would if we’re opening in, say, Montana or indeed the Bronx, just a few miles away,” Daunt added.

In recent years, Barnes & Noble has also reconsidered what it sells, reducing reliance on technical or specialist volumes in favor of broader lifestyle offerings, including stationery, greeting cards, gift items, the prerequisite Starbucks café, and other categories that drive both discovery and sales. There are special events including readings and signings, a children’s area where they can sit and read (and be read to), and plenty of adult seating to settle in with a new book.

The company has “evolved the Amazon out of our bookstores,” as Daunt puts it and has firmly prioritized the human experience, including collaborations with, for example, children’s favorite Moomin to promote and create special areas within stores. B&N is reclaiming the role of a community hub, returning on experience.

Site Selection Based on Local Lore

Daunt’s highly unconventional approach to B&N’s expansion reflects his own history as a bookseller rather than as a retailer. “We’re not that traditional big-box retailer where it’s all driven by the real estate dynamic,” he said. “Of course, you need the landlord with properties who wishes to lease them to you. But we’re in places where we think we will do well and where people want to buy books.”

These changes have paid off. The combined Barnes & Noble and Waterstones business now generates more than $3 billion in sales and over $400 million in profits. Perhaps the boldest sign of confidence is the advanced talks over a public offering. The IPO isn’t just a financial event; it is a validation of a belief that brick-and-mortar bookselling can thrive in a world dominated by ecommerce.

The strategy of deferring to local taste over stock-wide uniformity and treating stores as community hubs rather than depots of inventory stands in stark contrast to Amazon’s homogenized and algorithmically curated marketplace. And while Amazon’s sophisticated recommendation engines and global logistics continue to dominate online book sales, they cannot replicate the serendipity of browsing a thoughtfully merchandised bookstore. It’s that gap that gives Barnes & Noble a competitive edge.

Postcards From the Edge

Daunt’s intuitive leadership and the company’s resurgence come at a time when broader consumer trends have shown renewed interest in physical books and demand for in-person experiences. Viral social media movements around reading, such as the #BookTok phenomenon, have highlighted how discovery can flourish in community settings far beyond algorithms.

That said, bookstore sales in the U.S. declined 8 percent over the five-year period from $8.6 billion in 2019 to $7.9 billion in 2024, according to the Census Bureau’s Annual Retail Trade Survey. Barnes & Noble is bucking the trends, appealing to core book buyers and providing meaningful experiences. The brand’s comeback under James Daunt is not just about surviving Amazon’s endless domination; it’s about reminding the market that respect for people’s desire for discovery, curation, and local engagement matter more than ever.

Retailing During Wartime

Mark Cohen — Wed, 04 Mar 2026 05:01:00 +0000

The publicly stated explanation for this war, which is taking place between the U.S. and Israel in Iran, is the explicit intent to foment regime change. It’s anyone’s guess how this conflict will proceed or eventually end. Since World War II, regime changes have almost never succeeded as planned or anticipated. Not in Korea, Vietnam, Iraq, Yugoslavia, the USSR, Afghanistan, or Syria, to name just a few conflicts.

How will the war in Iran affect the retail industry? And the answer is: Disruptions in trade and travel will force retail to take a conservative path in 2026.

Retail Predictions on the War with Iran

Like it or not, a lot of economic—and therefore retail effects—of this brand-new conflict will hinge upon the conditions surrounding the safe passage of tankers through the Persian Gulf and the Strait of Hormuz. This is where 15 percent of the world’s oil and 20 percent of the world’s liquified natural gas originates and transits. Analysts estimate that even using alternate routing, a serious constraint in the Persian Gulf and at Hormuz could remove 8 to 10 million barrels per day from the market, enough to add perhaps $20 a barrel to crude oil prices if conditions worsen. Oil prices, currently at $72 a barrel, have already begun to climb and could easily hit, if not well exceed, $100 a barrel if this conflict isn’t quickly resolved, according to many economists who follow this lifeblood of the world’s economy. In trying to make sense of this new war, the prediction of a four-to-five-week engagement doesn’t sound credible. What is now happening in Iran is not in any way analogous to what just happened in Venezuela.

Is This Gas Shortage Déjà Vu?

So far, this war does not foretell the disastrous, albeit short-term, gasoline shortages that occurred in late 1973 and early 1974 when OPEC created an oil embargo on U.S.-bound petroleum shipments. Then, gasoline supply became extremely scarce; strict rationing took place in most major market centers. The retail business, broadly writ, was decimated for months on end. I was a Department Manager at A&S’s largest branch store in Hempstead, Long Island. Business dropped like a rock everywhere except in downtown Brooklyn, where gasoline was rationed throughout Metro NYC. If you couldn’t fill your car’s tank with a limited, every other day allotment of gasoline to get to work, you certainly weren’t predisposed to go shopping if you didn’t have to.

Since then, thanks largely to the onset of oil shale extraction techniques, the U.S. has developed significant oil independence. But this war does foretell a highly likely increase in already inflated energy prices. Historically, a $1 increase in crude can translate into roughly a 2 to 3 cent per gallon move at the pump; one analyst recently pegged the near-term pass-through at about 13 cents per gallon from the latest run-up. Higher fuel prices hit shoppers twice: directly at the gas station pump and through transportation surcharges embedded in the supply chain of the products on shelves.

More Economic Uncertainty

This new pressure on our economy will pile up on top of whatever replaces Trump’s illegal tariff strategy along with already rising retail prices of just about everything that is widely consumed by us all, and unprecedented increases in healthcare expenses. None of this bodes well for an already inconsistent retail environment with an industry struggling with uneven performances at the bottom of the retail food chain at stores like Target, instability in the middle at stores like Kohl’s and Macys, and chaos at the very top as Saks Global attempts to unwind its completely self-induced train wreck.

How will this affect Wall Street and all those consumers whose disposable incomes are directly or indirectly affected by the performance of the Street? Will a handful of tech companies, which have propped up the stock market throughout 2025, continue to provide air cover for an already stressed U.S. economy? Will the increased use of AI tech products continue to curtail new employment and fuel the increasingly evident presence of aggressive layoffs? I can’t predict the behavior of the stock market, but I think it’s clear that unemployment is going to become an increasingly problematic issue here. Reshoring remains a pipe dream as a near-term economic driver. The metal bending and needle trades are not, and maybe never will resurge in any meaningful way, certainly not this year.

Early Warning System

Retail, which has always been a canary in the coal mine with regard to the behavior of our overall economy, will now be under even more significant pressure this year. Retail does, after all, make up some 70 percent of the U.S. economy. The guarded prognosis, widely held by many, if not most, industry leaders, becomes even more problematic with a war underway in Iran. If this conflict becomes a “forever war,” which Trump promised would never occur on his watch, inflation could become explosive.

Reportedly, the American consumer, without regard to income level, currently lives paycheck to paycheck and is going to get hammered. They will support necessities as they have always done during difficult times, such as during Covid-19. But that’s it; discretionary purchases, otherwise known as general merchandise products, will get hammered as well.

Price will continue to be the primary driver of retail success and, as we’ve seen, not all retailers have the financial wherewithal and the assortment and merchandising disciplines to prevail. Is it possible that new fashion ideas will captivate the American consumer? Yes, but the consumers’ enthusiasm is invariably going to be muted. Add to all of this the upcoming November midterm elections will add fuel to the angst that seems to be increasingly blanketing consumer confidence.

A Forever War?

In my opinion, Trump will want to end this conflict as quickly as possible, but the Israelis are “in it to win it” and not predisposed to back off. Now, with the entire Middle East theater under fire, the likelihood that this conflict spills over into further disruptions in trade and travel is very real. In the face of all of this, conservatism in plans and outlook is vital for all retailers to navigate successfully, at least through the balance of this new year.

Is Saudi Arabia the New Luxury Hotspot?

Glyn Atwal — Mon, 02 Mar 2026 05:01:00 +0000

Entertainment Hub

Every retail trade show now has a Saudi presence. It is on a mission to prove its relevancy and profitability for brands outside the Kingdom of Saudi Arabia (KSA). Customers of these brands? Local, regional and international. Growth in regional tourism has benefited the Kingdom, which has not traditionally been considered a bucket-list destination. In 2025, Saudi Arabia welcomed a record 122 million domestic and inbound visitors, an increase of 5 percent versus 2024. But the Kingdom has bigger dreams.

The ambitions of Saudi Vision 2030 are gaining traction as the country works to diversify its economy. Saudi Arabia has positioned itself as both a regional and global entertainment hub, hosting mega-events ranging from Formula 1 and MDLBEAST Soundstorm to the FIFA World Cup in 2034. According to Taqua Malik, Founder & CEO at Freedomvisory Ltd, “Saudi Arabia is no longer an emerging market story, it is a scale-and-influence market where consumer sophistication, cultural confidence, and national transformation are converging at pace.”

Why should luxury brands expand their footprint into Saudi Arabia? It’s no longer an “emerging market” story; it is a scale-and-influence market where consumer sophistication, cultural confidence, and national transformation are converging at pace. For luxury, this is a chance to build enduring relevance with a young, discerning audience in a country shaping the region’s next chapter in culture, entertainment, tourism, and retail.

Tourism Retail

Anyone with a sweet tooth knows that Dubai chocolate has an unmistakable taste. This global culinary phenomenon is yet another reason to visit the Middle East. Dubai is already one of the world’s most popular tourist destinations and is reportedly the most popular city on TikTok. In other words, Dubai is a hotspot.

The success of Dubai Mall is a blueprint for why luxury retailers are chasing tourist spending. According to Chalhoub Group, personal luxury sales across the Gulf rose 6 percent to $12.8 billion in 2024 and are projected to reach $15 billion by 2027. This is arguably a much-needed boost to the bottom line of both waxing and waning luxury brands. Prada, for example, reported a 21 percent increase in revenue in the Middle East for Q3 2025.

Malls in the region remain powerful tourist magnets. The recent opening of Solitaire Mall in Riyadh has attracted a mix of lifestyle and luxury brands, from AAPE to Zegna. Retail investment is set to accelerate further. Knight Frank estimates that Riyadh will add 2.3 million square meters of retail space by 2030, including flagship developments such as the Mall of Saudi.

While tourist spending is estimated to account for approximately 50 to 60 percent of luxury sales in the Middle East, domestic demand will be pivotal to future growth. An expanding base of ultra-affluent consumers will have even greater spending power. According to the UBS Global Wealth Report 2025, Saudi Arabia leads the region with nearly 340,000 millionaires and is forecast to rise to 480,000 by 2029. This trend is cascading down the income pyramid. McKinsey & Co. projects that the number of households earning more than $250,000 annually will double between 2025 and 2050.

Next Gen Dominance

Saudi Arabia stands out as a youth-driven consumption market, with 63 percent of its population under the age of 30. It is a demographic dynamic that luxury brands can no longer afford to ignore. Dolce & Gabbana’s flagship store in Diriyah, which includes the DG Caffè, is now one of the brand’s largest locations globally.

The true game changer, however, is the rapid transformation of the economy. Women now account for more than one-third of Saudi Arabia’s workforce and over 45 percent of new entrepreneurs. This shift has empowered women to express personal identity and style in increasingly visible ways. According to Chalhoub Group research, Saudi women are the most engaged consumers of makeup and fragrance in the region. As Taqua Malik notes, “For luxury, this is a chance to build enduring relevance with a young, discerning audience in a country shaping the region’s next chapter in culture, entertainment, tourism, and retail.”

Cultural Relevance

Success in Saudi Arabia will be determined not only by a brand’s retail footprint, but also by its ability to embrace cultural relevance. According to The Future Laboratory, more than three-quarters (77 percent) of respondents believe luxury brands should offer localized collections or seasonal exclusives. For example, Brunello Cucinelli’s abaya capsule and Loro Piana’s Ramadan collection celebrate and respect local cultural identity.

Cultural relevance also extends beyond product into service and engagement. Discretion and intimacy are central to the luxury experience. Loro Piana’s Riyadh boutique, for example, features a VIC room, a private, appointment-only space. Malik observes, “The Saudi luxury consumer is values-led and socially attuned: they invest in quality, heritage, and prestige, but they also look for meaning, local resonance, and a brand’s ability to show respect through detail.”

For retailers, digital strategy must be equally culturally fluent. More than 90 percent of young Saudis actively use Snapchat, and high engagement combined with strong trust in peer networks makes the platform a vital touchpoint for luxury brands. Brands such as Givenchy were part of Snapchat’s 2025 AR Ramadan Mall. Malik adds that Saudis are “digitally fluent and globally aware, yet deeply proud of identity, rewarding brands that understand the nuance of Saudi social codes, family dynamics, and occasion-driven dressing.”

Saudi Arabia is still widely perceived as culturally conservative, but it is undergoing a shift not only in what consumers buy, but also in where they buy it. According to PwC, Saudi consumers make approximately 40 to 50 percent of their luxury purchases abroad. As luxury brands expand their physical presence within the Kingdom, spending will move closer to home.

Luxury brands can enter the Saudi market through multiple avenues. An investment license is primarily required when a brand intends to operate through its own Saudi entity, but it’s not the only route to market. Many luxury houses partner with regional operators such as the Chalhoub Group to navigate market entry, from securing prime retail locations to regulatory compliance and logistics. As Malik notes, “Partnering early can be an effective way to move quickly and de-risk rollout.” For example, Missoni recently opened its first store in Riyadh in partnership with Al Tayer Insignia.

The opportunity is significant. Riyadh offers luxury brand coverage of 65 percent, compared with 90 percent in Dubai. The viral success of Dubai chocolate is a reminder that the region’s vitality is deeply rooted in sensory pleasure and experience. Luxury has a natural resonance in Saudi Arabia, and according to Malik, the Kingdom “is building its own gravitational center, and luxury brands that approach it on its own terms will be best positioned to earn both trust and longevity.” There has never been a better moment for luxury brands to expand their horizons.

A Leading Economist Weighs In on the SCOTUS Tariff Reversal

Retail Unwrapped — Fri, 27 Feb 2026 05:01:00 +0000

The recent Supreme Court decision outlawing the “Liberation Day” tariffs has added another level of uncertainty to the financial outlook of American retailers. Join Shelley and Dan Altman, chief economist and bestselling author of the High Yield Economics newsletter, as they zero in on what the ruling will trigger for retailers and consumers. They discuss whether companies will claw back the tariffs they have paid. Dan says that although companies and the government have records of the money that was paid, it could be sorted out but would be extremely messy. He adds it would be nearly impossible to refund consumers by tracing those purchases to specific people. Ultimately, with the change in tariffs retailers will have higher margins, so, will prices come down? Dan cautions, “We have seen the economy in a sort of paralysis, both in the job market and in investment plans, because people didn’t know where these economic policies were going to land. But now we’ve opened up all this uncertainty again.” This candid conversation puts the challenges facing retailers squarely on the table predicting that small businesses will take the brunt of economic uncertainty over the next 12 months. Listen and learn how an economist clears the air on tariff chaos.

Special Guests

Dan Altman, Chief Economist and Bestselling Author, High Yield Economics

Transcript

Korean Brands Are Moving into a Mall Near You

Mark Faithfull — Wed, 25 Feb 2026 05:01:00 +0000

For much of the past decade, the dominant narrative for global retail has been framed around China and its manufacturing scale, digital platforms, ultra-fast and cheap fashion platforms, plus its ability to flood global markets with low-cost goods. Yet as regulatory pressure on Chinese exports intensifies in both the U.S. and Europe and geopolitical friction disrupts supply chains, South Korea, fuelled by the global phenomenon of K-pop culture, is emerging as a dynamic Asian force across beauty, fashion, lifestyle and specialty retail.

Korean Cultural Influence

The rise of Korean brands reflects a structural shift in how global consumers discover, trust and buy products. The visibility of K-Beauty has reached a tipping point, most notably next to London’s Chinatown, where tourists literally trip over one K-brand after another. There is no doubt that South Korea has arrived as a world influence.

What began years earlier as niche experimentation with off-the-wall beauty treatments from sheet masks and snail mucin has matured into mainstream adoption across the major retail chains. Brands such as premium skincare brand Laneige, nature-inspired Innisfree, derm-focused COSRX and skincare specialist Beauty of Joseon have moved from Asian beauty stores into Europe’s biggest chains, including Boots, Sephora and Douglas.

Sephora’s European rollout of Korean skincare lines accelerated last year, with COSRX’s Advanced Snail 96 Essence consistently ranking among its top-selling serums in France and Germany, while Laneige’s Lip Sleeping Mask became a viral bestseller thanks to TikTok-driven campaigns in the U.K. and Italy. Consumer appeal was not just about novelty but about perceived efficacy, transparency of ingredients and a narrative of innovation.

What’s the latest trend in Asian imports? And the answer is: Watch Korean brands that resonate with consumers with storytelling, propelled by evergreen K-pop culture.

Korean Brands Invest in Europe

At the same time, Korean beauty conglomerates have been laying the groundwork in Europe. Amorepacific—Korea’s answer to Estee Lauder—expanded its European logistics hubs in the Netherlands and Poland in 2025, reducing delivery times and opening direct-to-consumer channels. LG Household & Health Care, an equivalent to Procter & Gamble beauty or Unilever, strengthened its partnerships with European retailers and invested in localized product development, launching SPF formulations adapted to EU regulatory standards and European skin-tone ranges.

CJ Olive Young, South Korea’s dominant beauty retailer. broadly in the mode of Sephora or Ulta Beauty, also accelerated its international ecommerce push, recording double-digit growth in European orders last year. And in January, it forged a strategic partnership with Sephora in a move that marks the Korean firm’s entry into the fast-growing ‘middle vendor’ market connecting K-beauty brands with global distributors.

Korean Brands Beyond Beauty

Beyond beauty, Korean retail brands began to appear in categories previously dominated by Chinese players. XimiVogue, originally founded in China but increasingly repositioned with Korean-inspired branding and partnerships, expanded aggressively across Europe in 2025, with stores in Spain, Italy and Eastern Europe, with an offer that has often seen it dubbed the Korean Miniso. By 2025, Korean streetwear brands such as Ader Error, luxury menswear Wooyoungmi and eyewear specialist Gentle Monster had established flagship stores in European capitals and cultivated loyal followings among Gen Z consumers. Gentle Monster’s experiential retail spaces in London and Paris blurred the boundary between art installation and eyewear retail.

XimiVogue’s strategic pivot toward Korean cultural references proved timely. As European regulators tightened scrutiny on Chinese imports, particularly around product safety, sustainability claims and product dumping concerns as a fallout from U.S. tariffs, retailers with Korean branding have faced far fewer political and reputational barriers.

Indeed, this regulatory context is crucial. The European Union has introduced stricter enforcement of the Digital Services Act and tightened customs controls on low-value parcels, notably hitting Chinese ultra-fast fashion and marketplace platforms. And the mood music suggests that trade barriers for China will only become more challenging. Korean brands, by contrast, have benefited from South Korea’s status as a trusted trade partner with strong intellectual property protections and a reputation for quality manufacturing.

Korean Fashions Expand in the U.S.

Musinsa, Korea’s biggest curated fashion ecommerce platform, launched cross-border services targeting European consumers, leveraging curated Korean brands rather than mass-market imports. The same dynamic has played out even more dramatically in the U.S., where Korean brands have moved from cult status to mainstream retail. By the third quarter of 2025, the U.S. accounted for more than 51 percent of K-beauty’s global online sales, overtaking China for the first time as the world’s largest e-commerce market for Korean beauty products, with sales jumping 37 percent year-on-year.

NielsenIQ reported that K-beauty sales in the U.S. reached roughly $2 billion in 2025, far outpacing the growth of the overall beauty market and driven by facial skincare and rapidly expanding haircare categories. Major American retailers have responded by racing to integrate Korean brands into their assortments, with Sephora, Ulta, Target, Walmart and Costco having all expanded Korean product lines, while some retailers have created dedicated K-beauty zones.

Torriden officially entered Sephora’s U.S. network in 2025, rolling out hydration and derma products its products across more than 400 stores and online after viral TikTok exposure and a successful pop-up campaign. Amorepacific’s Aestura launched at Sephora early last year, positioning dermatology-led Korean skincare as a credible alternative to legacy brands. Herbal skincare specialist Hanyul debuted in over 300 Sephora stores in the same year, while independent Korean companies such as make-up and skincare brand Tirtir, premium d’Alba and Beauty of Joseon have started showing up within U.S. chains including Ulta, Target and Costco, reflecting a broader push into physical retail presence.

In grocery, Korean-origin supermarket chain H Mart has announced plans to open its largest-ever U.S. location in California, transforming a former Kohl’s site in Pacific Commons Shopping Center into a 100,000-square-foot experiential retail hub combining groceries, a food hall and dine-in restaurants. Construction is expected to start late this year.

Korean Big Picture

Amid it all, the role of entertainment is key. K-pop and K-drama continued to act as global marketing engines for Korean products and the international success of series such as drama Queen of Tears, global hit Squid Game and the sustained global tours of a myriad of groups, most notably BTS, have provided constant exposure for Korean fashion and beauty.

But what distinguishes Korea’s retail expansion from China’s is not just aesthetics but strategy. Chinese platforms have often relied on price leadership and logistical scale, pushing vast volumes of low-cost goods through digital channels. Korean brands, by contrast, have emphasized brand equity, storytelling and innovation. The Korean approach aligns more closely with premiumization trends in Western markets and the Gen Z era of little treats in a world that is offering them little comfort.

Regulation at the Heart of the Korean Approach

Another critical factor is agility when it comes to regulation and compliance. Korean companies have historically operated within stringent domestic regulatory frameworks, particularly in cosmetics and electronics. This has translated into smooth adaptation to European standards and, as a result, when the EU introduced updated cosmetic ingredient regulations in 2025, Korean brands were able to reformulate and relabel products faster than many of their Chinese competitors. Similarly, Korean electronics and lifestyle brands have leveraged their existing compliance culture to expand into smart home accessories, wearable devices and design-led consumer electronics.

Yet as more Korean brands enter European and U.S. markets, competition is intensifying. The risk of overexposure, brand dilution and the loss of their first mover advantage is real, particularly in beauty, where dozens of Korean brands now compete for shelf space and digital attention amid a fickle and short-memory customer base.

Korean retail has also been caught up in the ever-fluctuating U.S. tariff battles, and although most beauty, fashion and general merchandise goods face a 15 percent tariff, some categories, such as automobiles, are currently facing 25 percent tariffs. Balancing global expansion with authentic identity will be the defining test of 2026.

The Olympics Is a Runway Grab

Glyn Atwal — Mon, 23 Feb 2026 05:01:00 +0000

The Olympic rings are among the world’s most recognized symbols. Brands invest millions to be associated with the event’s values and global visibility. At the Milano Cortina Winter Olympics, legacy sponsors like Coca-Cola and Visa leveraged this platform to reinforce their brand stature. But a new gold medal contender has stepped onto the podium: luxury fashion. As Yuki Bi, CEO of Helios Worldwide, notes, “The ‘fashion as sport’ trend has been strong since the Paris Summer Olympics, and it is here to stay, at least for a while.”

What’s the latest shiny influencer strategy for fashion brands? And the answer is: Olympic champions.

Sportainment

The emotional pull of Brazilian skier Lucas Pinheiro Braathen winning South America’s first-ever Winter Olympics medal cannot be measured in social media metrics. It also helps explain why the Opening Ceremony, which featured not just Mariah Carey but also a runway show of white EA7 Emporio Armani and Ralph Lauren Americana-themed-uniforms, broke viewership records.

“It’s not new for brands to sponsor or design national team uniforms for major games,” says Bi, “but how it is being promoted, and the amount of attention they are garnering this Winter Olympics, is unprecedented.” This attention is driving demand for Olympic-themed merchandise. Polo Ralph Lauren’s Team USA Opening Ceremony Toggle Coat ($1,998) is already sold out in all sizes on the Ralph Lauren U.S. site. However, a key impact is the potential for brand earned media revenue (EMV), which can rival other sponsorship deals. According to data from Launchmetrics, Ralph Lauren had already generated $8.3 million in Media Impact Value (MIV) before the Winter Olympics even started!

This merging of sport and entertainment, or ‘sportainment,’ is a now-familiar formula across global events like Formula One. At the Winter Olympics, it is redefining engagement entirely. Clips of Snoop Dogg, Honorary Coach of Team USA, dominate feeds because sport has become storytelling for a new generation. According to Bi, “The popularity of the Olympic Games among Gen Z audiences stems from the vlog-like snippets of content across social media, especially TikTok and YouTube Shorts. In fact, most Gen Z audiences are watching the Winter Olympics via 15–30-second social media shorts.”

Fandom

Athletes have always been role models. Veteran skier Lindsay Vonn has been a Rolex Brand Ambassador since 2009. But recently, luxury fashion houses have been joining the race to sign the next sporting icon. At Beijing 2022, 18-year-old freestyle skier Eileen Gu’s gold medal tally led to a high-profile partnership with Louis Vuitton. The Winter Games have amplified celebrity endorsements into an entirely new form of influence. A game-changer is how fandom is creating a direct channel for brand storytelling at an unprecedented scale. Jutta Leerdam, who is an Omega Olympic ambassador, has over 6.2 million Instagram followers. Authentic content is driving engagement. Canadian speed skater Brooklyn McDougall’s unboxing her Lululemon gear went viral on TikTok.

High Performances

Luxury fashion partnering with sport isn’t new, but the Winter Olympics gives brands a stylistic signature and mass reach. Armani outfitting Team Italia makes cultural sense, but the Games also offer a platform for function-first brands such as Lululemon with Team Canada and Uniqlo with Team Sweden to elevate their fashion credibility.

“Fashion brands are realizing that their audiences and sports fans are no longer mutually exclusive,” Bi says. “In fact, Gen Z finds sports a very cool topic that adds social credibility to their lives. So, when brands invest in the Winter Olympic Games, they are also acquiring a brand new, aspirational young audience that they can grow in the future.”

The Winter Games are a live product demo under some of the most extreme conditions imaginable. When Lucas Pinheiro Braathen won gold wearing a white Moncler race suit, it was a victory for Moncler’s technical innovation. The brand extends the message with Moncler Grenoble’s “The Beyond Performance” exhibit in Milan. As Bi notes, “Younger audiences are learning from this year’s Milan Winter Olympics that competition gear can be fashionable and attractive while maintaining functionality.”

Brands are also replicating the Olympic experience in their retail environments, from the snow-white Armani jackets at Milano Linate Airport to experiential formats such as Ralph Lauren’s Olympic-themed pop-ups stretching from Cortina d’Ampezzo to Aspen.

Inclusivity

As the Winter Paralympics approach, inclusivity is emerging as a defining narrative. This is less about logo-first branding and more about meaningful design. Brands like Lululemon have introduced “Paralympian-approved” adaptive gear with magnetic zippers, seated-fit silhouettes, and braille details. It’s a powerful message that fashion and sport have no boundaries.

The Winter Olympics in a fashion capital is more than a natural convergence of sport and style. The Games have become a global podium for luxury brands. The result is a boost in brand prestige and reputation. Brand Finance reports that luxury apparel buyers who followed the Paris Olympics rated Louis Vuitton more highly for ‘reputation, social commitment, brand I love, trust, and recommendation.’

It’s a return on investment that can translate into long-term revenue growth. The 2028 Summer Olympics in Los Angeles will be even more of a spectacle and will put pressure on luxury brands to up their game. Which brands are ready to go for the gold?

What’s TikTok Shop’s Future?

Jasmine Glasheen — Wed, 04 Feb 2026 05:01:00 +0000

The joy of discovery is TikTok’s competitive advantage, so it doesn’t have to have the perfect product for every consumer. It doesn’t try to be Amazon. Consumers don’t go to TikTok Shop to buy Clorox Wipe refills, but 83 percent of shoppers have discovered a new product on TikTok Shop, and 70 percent have discovered a new brand.

The growth of TikTok Shop in 2025 is a case study in consumer interest versus international trade policy. Despite tariffs having cut profits from Chinese companies by the Peterson Institute estimates averaging 47.5 percent on Chinese imports, American consumers still provided the largest chunk of TikTok Shop’s quarterly revenue, which more than doubled from the previous year to reach a projected $15 billion in U.S. sales for 2025. On a global scale, TikTok Shop moved $19 billion in the third quarter of 2025 alone.

Will TikTok Shop U.S. change under American ownership? And the answer is: The platform will carry on with its successful, personalized feeds and has its sights set on behemoths Instagram and Facebook to scale and steal marketshare.

TikTok Rising

Much has been said about TikTok Shop gaining on Amazon. TikTok Shop’s U.S. revenue grew by 128 percent year-over-year through April 2025, whereas Amazon U.S. ecommerce retail sales rose 7 percent in the same period, and its growth is decelerating as Gen Z and millennial consumers shift to social commerce over online marketplaces.

Let’s look at how TikTok is leading engagement-driven retail, how the carve-out of TikTok’s U.S. business into a separate entity could change both its own retail strategy and the U.S. retail landscape overall. A consortium of investors is acquiring its U.S. operations. This group includes tech company Oracle, private equity firm Silver Lake, and the investment firm MGX. As part of the deal, Larry Ellison, the co-founder of Oracle, is leading the consortium. The deal is expected to be finalized by January 2026, making the U.S. division a separate, American-controlled entity.

Leading the Engagement Economy

TikTok wasn’t the first app to give users algorithmic suggestions based on their engagement habits, rather than shopping behavior alone. But TikTok Shop did turn engagement-driven selling into an art. With over 70 million products, a strong coupon strategy for next gens’ value consciousness, and a July “Deals for Days” promotion that rivals Amazon Prime Days, TikTok Shop has revolutionized the way users engage with brands.

Rather than offering a categorical search (where users type their search intent into the bar at the top of the screen and the app provides recommendations), TikTok Shop’s algorithm automatically provides engagement-driven product recommendations. Content users engage with videos watched, creators followed, time spent hovering, etc., all of which inform the content sequence shown to users.

TikTok Shop harnesses the power of interest-driven impulse shopping through entertainment, rather than consumer necessity, like Amazon. This phenomenon is (obnoxiously) called “shoppertainment,” a phenomenon in the retail industry pioneered by QVC and the home shopping network. But using “shoppertainment” to lock down Gen Z consumer loyalty is where TikTok Shop excels. The idea of shoppertainment isn’t giving consumers exactly what they need; it’s incentivizing consumers to buy by creating desire. Instagram and Facebook each generate 3-4 times the GMV of TikTok Shop, and Instagram’s image-based search and heavy influencer presence make it TikTok’s main competition.

Discovery or Consumer Targeting? It’s All in the Algorithm

The joy of discovery is TikTok’s competitive advantage, so it doesn’t have to have the perfect product for every consumer. Since it doesn’t host the household name brands of its U.S. competitors, TikTok Shop can’t compete for U.S. consumers based on specific product assortments. So, it doesn’t try to be another Amazon. Consumers don’t go to TikTok Shop to buy Clorox Wipe refills, but 83 percent of shoppers have discovered a new product on TikTok Shop, and 70 percent have discovered a new brand.

So, how does TikTok Shop “shoppertain” (apologies) notoriously frugal Gen Z consumers into spending on products they don’t need? The surprising product selection is innovative; my feed shows stick-on camera holders, k-beauty serums, hair styling apparatuses, powdered yerba mate tea, etc. often advertised by influencers I know offline. TikTok Shop harnesses the power of its micro influencers and macro influencers to create a sense of safety around imported products. (You’d think Kim K’s diet tea snafu in 2018 would’ve awakened consumers to the fact that the celebrities foisting products upon them don’t always use said products, but here we find ourselves.)

The team behind TikTok understands the discovery-driven niche in the burgeoning arena of social commerce. The platform’s new growth framework is “ACE,” which stands for “Assortment, Content, and Empowerment,” and is focused is on giving sellers the free tools to produce content to attract their audience. And these efforts aren’t lost on prospective sellers. TikTok recently reported 171,000 local and small businesses on the platform, and sales to U.S. SMBs grew by 70 percent YoY.

Federal Pushback on Chinese Social Media

It’s hard for the federal government to make a case against TikTok. Since it hosts so many small and local businesses, the idea that TikTok Shop is stealing sales from U.S. retailers doesn’t stand up to fact. The positioning of data centers and customer data is a data sovereignty issue. The sale is a move to ring-fence U.S. data and commercial activities within the borders of America.

The era of governmentally ascribed consumer behavior has come to an end. TikTok’s fame doesn’t just seem impervious to trade policy; it benefits from the headlines even when those headlines are about the forced sale of its parent company, ByteDance, to U.S. investors. We will be waiting to see how or if the new owners alter the online marketplace.

Far from the sale driving U.S. shoppers back to Amazon or another national seller, TikTok Shop now commands 18.2 percent of total social commerce in the U.S. and that share is expected to hit 24.1 percent by 2027. Now that TikTok Shop is partially owned by a group of heavy-hitting millionaires, we might see it have the investment power to grow from a disruptive underdog into an influential architect of American retail.

Washington’s attempt to curb the influence of Chinese retailers reveals a fascinating disconnect between what consumers want to purchase and the actions of their elected officials. I’ve said it before, and I’ll say it again: Retailers can no longer remain neutral. The TikTok controversy wasn’t about a social issue like Eugenics that impacts all marginalized people, like American Eagle’s “Great Jeans” campaign this year. Consumers’ indifference to the government’s drive to abandon the platform evidences a greater shopper shift towards the non-geopolitical. While the government’s issue was, ostensibly, data protection from foreign entities, it hasn’t stopped next gens from using TikTok Shop.

For now, the data is clear: If the TikTok algorithm continues to deliver discovery and entertainment, we’re predicting consumers will keep choosing the “For You Page” over the Google search bar or their Amazon feed. And that is proof of a larger competitive ecommerce challenge, regardless of geopolitical issues.

The Chinese Are Coming

Mark Faithfull — Mon, 26 Jan 2026 05:01:00 +0000

While President Donald Trump continues to flip-flop on tariffs, the message coming out of this year’s MAPIC event in Cannes on the French Riviera was clear: Asian brands aren’t waiting around. They’re heading West, and they’re planning to scale up fast.

Westward Ho

The standout theme from MAPIC 2025—Europe’s biggest retail real estate event—was the surge of Chinese and Asian brands setting their sights on the U.S. and Europe, with aggressive expansion plans and a long-term outlook. “When it comes to the U.S., Chinese brands are in this for the long haul. They’re not chasing short-term profits. These companies are showing real confidence, creativity, and design strength,” said Sam Foyle, London-based Co-Head of Global Retail at broker Savills. As a result, he added that most Asian retailers appear to view tariffs as a temporary setback rather than as a deal-breaker.

Should U.S. and European retailers welcome the influx of Asian retail brands, or fear them? And the answer is: When it comes to expansion Chinese brands are in this for the long haul. They’re not chasing short-term profits. These companies are showing real confidence and most Asian retailers view tariffs as a temporary setback rather than as a deal-breaker.

Breakneck Expansion

Things are moving fast. As recently reported by The Robin Report, Chinese online giant JD.com is set to reshape the consumer electronics retail sector in Europe after it launched a takeover offer for Ceconomy, the parent company of German retail giants MediaMarkt and Saturn. The deal is valued at about $2.5 billion and is expected to be complete in the first half of 2026. Out of the gate, this positions JD to challenge Amazon’s dominance in Europe’s consumer electronics market.

But much of the activity is coming from brands with extraordinary aspirations. One of the fastest-growing is Miniso, a Guangzhou-based lifestyle retailer that’s been on a rapid global expansion streak. Founded in 2013, Miniso now operates around 8,000 stores across 111 markets, debuted in the U.S. in 2017 and has nearly 500 stores in Europe. Many American readers might first have taken note when it opened a flagship Times Square store in New York.

After breakneck expansion, Miniso has turned its attention to large-format superstores in high-traffic areas, leveraging partnerships with well-known IP brands like Marvel, Disney, and Barbie. After testing its Miniso Land concept in Shanghai, the company launched its first Miniso Land stores outside China in Madrid, Spain and Bangkok, Thailand and most recently at the West Edmonton Mall in Canada.

“The Miniso Land format averages about 10,000 square feet, much larger than our standard 3,000 square foot stores,” said Vincent Huang, Miniso Group Vice President and General Manager of Overseas Business. “They’re designed for experience, fun, and engagement, especially for younger shoppers.” According to Huang, one Miniso Land store in China has generated roughly $14 million in sales within its first nine months. While the company expects to slow its overall store openings slightly after years of rapid expansion, it plans to continue rolling out large flagship stores across major U.S. and European cities, focused far more on experience and engagement.

“While our store expansion pace may slow a little after some incredible years growing the brand around the world, we want to open more of these large stores where we can really showcase our IP collaborations and also our own IP,” he added. “I think that if you bring together products that really resonate with shoppers and then you are able to sell them at a great price, then you have a fantastic proposition,” he stressed.

Malaysia Joins the Road West

Another relative unknown in the West is Malaysia’s home improvement chain Mr. DIY, which continues to grow at an astonishing pace. Since launching in 2005, the chain has opened more than 5,200 outlets across 14 markets, including 1,000 new stores last year and another 1,200 expected by the end of 2025. The retailer is currently focused on expanding across Europe, including Spain, Poland, Turkey, and soon Romania, the Czech Republic, Hungary and perhaps Greece. “Germany and neighboring markets are a key focus for us as we maintain our current growth momentum,” said Mr. DIY Chief Operating Officer Leo Gann.

Children’s apparel brand Balabala, part of China’s Semir Group, has also been pushing international growth and debuted in California in November. With over 4,500 stores in mainland China and Hong Kong and 100-plus overseas, the company has opened its first U.S. store at the Stoneridge Shopping Center in Pleasanton, CA and its debut European stores will open in Italy in 2026, with three sites identified.

Nicole Zhou, Senior Director of Semir & Balabala’s International Division, said that as the global fashion market faces new challenges, brands are increasingly being driven to look beyond traditional boundaries to find growth opportunities. “Over the next year, we’ll strengthen our Asian presence and expand into markets where we don’t yet have a physical footprint,” Zhou said. “The Middle East remains a strategic focus; our store count there is expected to double within the next 12 months. We’ve finalized a development deal in Italy and are preparing for broader European entry.” Zhou added that North America is currently in a “test phase,” both online and offline, as the company studies consumer behavior to shape its future expansion plans.

China’s Answer to Urban Revivo?

Urban Revivo, often compared with Spain’s fashion powerhouse Zara, is also making waves. Founded in 2006, the fashion chain has been expanding into major capital cities, opening flagship stores in New York, London, and other fashion-forward markets to raise global visibility. “Tariffs have minimal impact on consumer retail,” said Urban Revivo CEO Leo Li. “Still, we’re optimizing our cost structure and sourcing strategy to offset any potential increases.”

Meanwhile, tech and electronics powerhouse Xiaomi, best known for cell phones, is setting its sights on opening about 10,000 new Mi Home stores globally within five years and has recently entered the electric vehicle space. “We’re building on our brand recognition and moving quickly to open EV showrooms and stores across Europe and the U.S.,” said Eva Niu, Xiaomi’s Head of Retail for Western Europe.

The Shein Paradox

The influx of Chinese retailers and Asian products has not gone without controversy, and a lot of that has swarmed around the November opening of super-cheap fashion retailer Shein within the BHV Marais department store in central Paris.

The run-up to Shein’s debut ignited a political, cultural and industrial backlash in France that has touched on questions of national identity, ethical consumption and the future direction of French fashion. Yet despite the furor, the store attracted “more than 50,000 visitors” in its opening days, according to Frédéric Merlin, the unapologetic President of Société des Grands Magasins (SGM), which owns BHV. He reported an average basket of over $52 for customers and said that “nearly 15 percent of them went on to shop in other departments” of the department store.

Yet in the wake, Galeries Lafayette pulled its name from four more department stores licensed to SGM that were also set to introduce Shein shop-in-shops. As a result, those plans were cancelled, while a string of brands including A.P.C., Agnès b, Aime Cosmetics, Figaret Paris, Le Slip Français, Maison Lejaby, Maison Serge Lesage and Odaje pulled out of the Paris BHV Marais store.

France’s parliament is also debating a proposed €2 ($2.15) levy on low-cost fashion imports, which could take effect in 2026 and would precede a similar European Union-wide tax that is not expected to be in place before 2028. The French initiative, intended as a stopgap ahead of the economic bloc’s delayed plans, would mark one of the first national attempts to rein in the surge of ultra-cheap apparel and merchandise flooding European markets from Asia.

Lawmakers are also considering introducing an additional environmental charge of up to $5.40 per parcel, which could rise to $10.80 by 2030, reflecting growing political pressure to address the environmental and social costs of fast fashion.

Industry bodies such as EuroCommerce have also called on the E.U. to rally the European nations around a more rigorous implementation of current rules and regulations over product compliance, claiming that many products targeting the continent do not meet European standards.

Gen Z Key to the China Syndrome

What is unquestionable is the deep ambition of Asian retailers to create a significant physical footprint in the U.S. and Europe, bolstered by their breakneck expansion rates to date, proving that they can do it just because they’ve done it.

Will Gen Z’s insatiable desire for cheap chic flag? That’s the hardest question to answer; a conscientious consumer generation that continues to be sidetracked by rock bottom prices, this conflicted demographic could be the key to whether the west can be won by Asia.

What Does Hong Kong’s Quiet Comeback Mean?

Ross O'Brien — Tue, 20 Jan 2026 05:01:00 +0000

Last month, Prada reopened its flagship boutique in Hong Kong in Alexandra House in Central. This is after years of downsizing and store closures, both for the Italian luxury giant and Hong Kong retailers overall. Prada’s relaunched boutique is now its largest in the region—reportedly some 14,000 square feet over three floors.

You’d think this roaring comeback would have been accompanied by tremendous fanfare. Yet, except for a modest street campaign, Prada’s relaunch was a discrete affair—much like the rest of Hong Kong’s quiet retail bounce back in 2025.

Prada’s supersized return to its iconic post, however, might be an early signal of the luxury market recovery here in China—as well as a portent of how physical high-end retail is changing.

Hong Kong retail closed on a high note last year. Retail sales rose steadily over the year, and, $4.3bn in November were up 6.5 percent over 2024. Property transactions—always a bellwether of Hong Kong consumer confidence–soared to a four-year peak, up 15 percent over 2024, capping a nearly year-long sales streak.

While domestic consumer confidence is important to the Hong Kong retail scene, it is tourism that is seen as a stronger driver. Here, too, 2025 was a banner year: visitor arrivals were up 12 percent to nearly 50 million, three-quarters of whom were from mainland China.

But Hong Kong, like Prada, has not been making as much noise about these gains after working through years of sluggish post-pandemic recovery. This is partially due to timing. While economic numbers are robust, a number of recent somber events have dampened the mood here. These have included the horrific Tai Po housing estate fires, which claimed over 160 lives, curtailed many festivities over the holiday season, including the cancellation of the city’s annual New Year’s fireworks display.

All of this might be informing Prada’s low-key reopening, even as they prepare to open another new 8,000 square foot store in a high-concept immersive art, entertainment and luxury retail space over on Kowloon. Both these are experiential destinations, brimming with Instagrammable nooks and high touch concierge services, suggesting that dwell time and social media amplification are becoming as important metrics as ATV.

Prada, like retailers across Hong Kong, is finally enjoying the steady retail recovery with quiet confidence in the luxury market in an otherwise turbulent global economy, particularly for a city sitting on the fault line of a persistent U.S.-China trade rift.

Why We Can’t Quit China

Ross O'Brien — Thu, 15 Jan 2026 05:01:00 +0000

American protectionists had much to celebrate this holiday season. Recent topline trade data suggests that U.S. tariffs on Chinese goods have caused American importers to purchase much less from China than they did before Trump’s second administration launched its global tariff agenda on ‘Liberation Day’ in April, with a particular focus on turning up the heat on an already raging trade war with China. In turn, however, they have yielded little material benefit for U.S. consumers, neither in terms of increasing consumer affordability, redirecting investment towards U.S. innovation and productivity, nor—perhaps the federal government’s most pressing goal—to stop China’s increasing dominance of the world’s supply chains.

In fact, in most cases, tariffs and investment restrictions aimed at China have accelerated the opposite effect, and given China many additional months to solidify its position as everyone else’s most important trading partner. U.S. manufacturing has not significantly replaced Chinese goods for American consumers. The restrictions have caused a diversion of imports to elsewhere from countries in turn, increasingly reliant on Chinese components and machines to produce them.

Will 2026 see a continuation of the volatile tariff swings of 2025 and will the U.S. stop importing from. China? And the answer is: It is unlikely that tariffs will stabilize into something more predictable—not free trade, but a stable managed relationship where some doors close while others remain strategically open, especially when it comes to a pragmatic relationship with China.

Down, But Not Out

American imports from China have indeed plummeted compared to 2024 levels, dropping 29 percent in November alone. The Trump administration’s effective tariff rate on Chinese goods has yo-yoed over the course of the year, and has added more than 40 percent to the cost of those imports, squeezing Chinese manufacturers and forcing American retailers to absorb higher costs or pass them to consumers.

Tariffs may have succeeded in reducing American purchases from China, but they have both failed to reduce overall American trade deficits and have accelerated China’s global market expansion at America’s expense. Chinese exports to Southeast Asia surged nearly 14 percent year-over-year in 2025 (a region that has been a key supplier of consumer goods to America). Chinese exports to Africa jumped 27 percent, and nearly 9 percent to Europe—gains that more than compensated for lost U.S. sales and have allowed China’s global trade surplus to top $1 trillion trade surplus in the first eleven months of 2025—the highest ever recorded.

The tariff policy did achieve what it technically set out to do. Average effective tariff rates on Chinese goods reached 39.2 to 47.5 percent by mid-year. U.S. Census Bureau data reveals American imports from China were $242 billion through September 2025, compared to $439 billion in 2024—roughly a 45 percent decline. Consumer confidence in holiday spending suddenly crashed: Gallup’s November consumer spending poll found gift purchase estimates dropped 23 percent from the month before, to $778, which represents the largest single-month decline the research house has ever recorded, steeper even than during the 2008 financial crisis.

Despite this, the overall U.S.-China trade deficit has not moved much: Through September 2025, the bilateral merchandise trade deficit was $160.5 billion, and is estimated to be around $214 billion for the full year. 2024’s deficit, of $295.5 billion, was higher, but China’s still clearly maintained the upper hand, and American businesses and consumers have paid the price.

Neither did Uncle Sam’s coffers overflow with tariff receipts. The federal government collected over $101 billion in tariff revenue between January and August 2025, but some studies suggested that as much as 25 percent in addition has been uncollected because importers changed purchasing patterns to avoid tariffs.

This reveals the core flaw in tariff-based trade strategy: Global commerce is being redistributed, not rebalanced. Chinese goods never stopped flowing to global markets; they simply took detours around American tariff walls. This strategy has thinned margins for Chinese manufacturers, but it has kept China’s well-oiled export machine running smoothly, and increased its global lead over American producers in the process. Countries once bought American goods now purchase Chinese alternatives at significant discounts.

The U.S. government seems to have shot itself in the foot in its showdown with China. Although America’s door is completely shut to China, signs of selective re-engagement are emerging. Biotech is one such area, and could be a harbinger of how U.S. retail and consumer goods more broadly could work back to a pragmatic trade relationship with the world’s biggest supplier.

China’s Medical Exemption

Despite the U.S. government’s relentless efforts to decouple its economy from China, and the particular success it has enjoyed in chilling cross-border trade and investment in AI, semiconductors and other strategic high-tech, American policy toward China is decidedly not unidirectional. American banks and businesses have found that some avenues are still open to them, particularly in market segments—like rare earth minerals or pharmaceuticals—where American industry has no other choice but to deal with China.

Pharmaceuticals are a particularly thorny area, in part because, like digital technologies, they are seen as strategically sensitive. The U.S. BioSecure Act was first muted in January 2024 by bipartisan lawmakers prohibiting federal agencies and contractors from procuring biotechnology equipment or services from “companies of concern”—primarily state-linked Chinese firms. But to date, it has not been passed, although provisions were incorporated into the National Defense Authorization Act enacted in December 2025.

“There’s a hard firewall between Silicon Valley and China when it comes to AI or semiconductors, but in biotech we’re still able to receive U.S. investment,” says George Lin, Chief Strategy Officer at Hua Medicine, a Hong Kong-listed pharmaceutical company focused on diabetes medications, financed by Arch Ventures and Venrock (the Rockefeller family’s venture capital arm). Hua continues to thrive—it hopes to soon launch a Type 2 diabetes treatment in the U.S., which has seen radical remission rates in its Chinese clinical trials. Lin sees his industry’s challenge for American manufacturers, retailers and consumers that lies at the heart of America’s anti-China stance, and the road back towards a more normal trading relationship. “The fact that attempts like the Bio Secure Act haven’t succeeded shows there’s an understanding—even in Washington—that cutting off this exchange would hurt innovation and patient care in the U.S., and globally.”

China has built extraordinary infrastructure for drug development, of both high quality and low cost. This makes decoupling economically irrational for American pharmaceutical companies, as it would simply slow global drug development without accelerating American innovation. This has led to a controlled re-engagement—and this could foreshadow how consumer retail supply chains could also, slowly, normalize.

The Long Road Back to Normal-ish

The future likely involves sustained differentiation rather than across-the-board decoupling. Sectors deemed strategic for military, intelligence, or advanced manufacturing purposes will face intensifying restrictions: semiconductors, advanced computing, synthetic biology applications, and quantum computing. Tariffs on standard consumer goods and manufacturing will persist, though probably at somewhat lower rates following the October 2025 agreement reducing reciprocal rates from 145 percent to 10 percent. But sectors offering benign applications with genuine human welfare benefits and where American independence proves economically irrational—pharmaceuticals, medical devices, basic research—will continue operating across geopolitical boundaries.

Will 2026 see a continuation of the volatile tariff swings of 2025? It is unlikely that they may eventually stabilize into something more predictable—not free trade, but a stable managed relationship where some doors close while others remain strategically open. China’s record $1 trillion trade surplus will underpin the country’s continued resolve to compete, and it is very unlikely that the rest of the world will have the manufacturing capacity or the political will to converge on protectionist policies on par with America’s.

For U.S. consumers, there will be no immediate relief, as the world collectively fails to quit China. But as the ongoing cross-border collaboration in the pharma sector reveals, U.S. policymakers are capable of balancing national strategy with commercial realities. As economic pressures mount for the average American consumer, perhaps the government will begin to bring the same pragmatism they show in biotech into its broader tariff strategy.